An insurance policy form or endorsement may not be delivered or issued for delivery in this state unless the form has been filed with and approved by the commissioner. Each filing shall be made not later than the 60th day before the date of any use or delivery for use.

Policy forms for use with large risks are exempt from filing for prior approval if the forms are to be used with a "large risk". "Large Risk" is defined as an insured that has total insured property values of $5 million or more; an insured that has total annual gross revenues of $10 million or more; or an insured that has a total premium of $25,000 or more for property insurance, $25,000 or more for general liability insurance, or $50,000 or more for multiperil insurance.

The commissioner may disapprove a form filed under §2301.006 or withdraw approval of a form if the form (1) violates any law, including a rule adopted under the Texas Insurance Code, or (2) contains a provision or has a title or heading that is unjust or deceptive, encourages misrepresentation, or violates public policy.

Applications

Not Required to be Filed For Approval Unless Being Made a Part of the Policy

Language used in arbitration agreements is to be consistent with that of the policy: to wit, don't use the word "parties" when you actually mean insured(s) and insurer. Binding arbitration is okay. Arbitration agreements may be mandatory. Arbitration must be held in Texas for Texas policyholders unless mutually agree on an alternate. In general, arbitration language cannot be unjust, misleading or deceptive.

If the policy is a claims made policy a disclosure to that effect must be prominently displayed on either or both the declaration sheet or the first page of the policy. The disclosure must be plainly readable bold type.

A policy provision advising the insureds of a right to purchase an extended reporting endorsement. The policy must give the insured a minimum of thirty days to purchase the extended reporting endorsement and the minimum term of the extended reporting period must be at least one year. An extended reporting period unlimited in time must be available.

Notice of settlement of claim under casualty insurance policy. EXCEPTION - This article does not apply to a casualty policy that requires the insured's consent to settlement of a claim against the insured; or to fidelity, surety, or guaranty bonds.

Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. The Texas Third Court of Appeals issued an opinion that acknowledges that the language providing 2 years and 1 day from the date the cause of action first accrues satisfies the statutory requirement of §16.070, Civil Practices and Remedy Code. ( http://www.search.txcourts.gov/Case.aspx?cn=03-08-00408-CV) Case #03-08-00408-CV

A contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonable. A stipulation that requires notification within less than 90 days is void.

"Other insurance" clauses or similar provisions should not contain "anti-stacking" or "non-cumulation" language that excludes or limits coverage in other separate but applicable policies that are issued by the same company, affiliated companies, or by other unaffiliated companies.

It is permissible to state whether the coverage in one policy is primary or excess over other applicable policies, or to coordinate limits in proportion to total limits available in applicable policies.

TDI will consider for approval anti-stacking language if:

the anti-stacking provision is limited to the same "occurrence" and the other coverages are in the same policy or package issued by the same company.
OR

the anti-stacking provision is on a separate endorsement, is limited to the same "occurrence," and

the company issued the policy for different operations or locations, and intended that only one policy limit apply to prevent unintended duplication of coverage for which no premium has been paid, and the applicable operations and locations are scheduled on the endorsement; or

the company or affiliated companies issued separate policies and the applicable policies are scheduled on the endorsement.

Before TDI can approve anti-stacking language, the company must provide appropriate rate consideration and rate analysis. A "rate analysis" is the company's actuarial justification for the rate consideration given, or not given, for use of the exclusion or limitation. This would include the reasons for the amount of any rate credit or the justification for the position that no rate credit is given.

If the coverage form or endorsement contains a provision amending the insuring agreement or the definition of occurrence to limit or eliminate coverage for continuous or repeated trigger losses, the restriction must be limited to that injury or damage "KNOWN" to the insured.

Policies may be amended to provide defense within limits of insurance, but only by endorsement. Must be fully disclosed to consumers and rates need to be adjusted accordingly. Forms/endorsements will not be approved until P&C Actuarial acknowledges that rates are acceptable.

If policy language requires examination under oath for anyone other than the named insured and spouse, the provision must also state that a parent or guardian may be present during any examination of a minor.

If Mobile Equipment redefined to include self propelled vehicles with certain types of permanently attached equipment (i.e. snow removal, street cleaning) of less than 1,000 pounds of gross weight, must include one of the following statements in either the coverage form being amended or the endorsement being submitted: 1) However, mobile equipment does not include any land vehicles that are subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged. Land vehicles subject to a compulsory or financial responsibility law or other motor vehicle insurance law are considered autos; or 2) The intent is to cover vehicles not designated for use on a highway.

Exclusions may be considered with appropriate rate analysis. A "rate analysis" is the company's actuarial justification for the rate consideration given, or not given, for use of the exclusion. This would include the reasons for the amount of any rate credit or the justification for the position that no rate credit is given. NOTE: Approval of a punitive/exemplary damage exclusion does not relieve an insurer of any contractual obligation to defend which may otherwise exist in the policy.

Definition of "abuse" in abuse, physical abuse, or molestation exclusion must be included. Must include wording, "For purposes of this endorsement, abuse means an act which is committed with the intent to cause harm".

These types of exclusions require a rate analysis and may also require rate consideration. A "rate analysis" is the company's actuarial justification for the rate consideration given, or not given, for use of the exclusion. This would include the reasons for the amount of any rate credit or the justification for the position that no rate credit is given. Must attach a disclosure form to every policy to which the exclusion is attached and manual rules should reflect this requirement.

Exclusions for TSE, including all variations of the disease, must be limited to the following: Insureds that 1) import or distribute imported meat, meat by-products or any other bovine part or products containing bovine parts for resale; 2) utilize imported meat, meat by-products, blood or any other bovine part in their manufacturing or processing, or in any product that is injected, applied topically or ingested by humans or any other animal; or 3) operate in the chain of commerce (including but not limited to handling, processing, distributing, selling, or serving) for deer or elk, whether imported or not.

Required for subsidence, tobacco, electromagnetic field, PCB and drywall exclusions. Must attach a disclosure form to every policy to which the exclusion is attached. Disclosure form does not have to be signed by the insured.

Coverage forms are prior approval. Change endorsements may be used to change insured address, etc. but may not be used to change, alter or "clarify" coverage in any way. Company must provide verification that the endorsement will not be used to change, alter, or clarify coverage.

If there is a Broad Form Nuclear Exclusion Endorsement or Nuclear Exclusion Endorsement, it must include definition of "waste" as per General Casualty Bulletins Nos. 547 & 548. (Not a Mandatory State Endorsement.)

Texas Changes - Airport Liability Endorsement

If using ISO forms, rules and rates, endorsement containing wording similar to CG 01 01 should be attached to all policies covering airport risks.

Insurer's requirement to maintain toll-free number to provide information concerning policies issued by the insurer and to accept complaints from policyholder. Article contains an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year or to an insurer with regard to fidelity, surety, or guaranty bonds.

Chapter 2251 does not provide for the filing of rates on an individual basis. Each insurer shall file with the Commissioner all rates, supplementary rating information, and reasonable and pertinent supporting information for risks written in this state.